While many jurisdictions set statutory limits on interest rates, they aren't always enforceable. Why? Consumers often agree to rates higher than the limit and waive their protections. This often renders legal interest rate limits to little more than general guidelines. However, generally speaking, Maine's interest rate limit is six (6) percent.
How Do Creditors Get Around Statutory Interest Rate Limits?
The answer is in the fine print, quite literally. Consumers may be required to pay higher interest rates if agreeing to do so is a condition of getting a credit card or loan. Additionally, depending on the terms of the contract, borrowers often agree to give credit card issuers the green light to raise rates at a later date. This may be a lengthy paper contract for a car loan or a simple click of the mouse when agreeing to the terms of a credit card application.
What Is Usury?
Statutory limits on the amount of interest a lender may charge are sometimes called "usury laws." While formal usury charges typically are reserved for so-called loan sharks and certain payday lenders, usury is a term dating back to the Middle Ages. At that time, usury referred to the charging of interest in general, which was largely frowned upon. It later came describe particularly excessive interest rates.
When reasonable interest charges became more common, the term was used to describe particularly excessive interest rates. Interest has become relatively universal, but is still looked upon unfavorably by some.
Does Maine Have A Usury Provision On The Books?
No, the statutes and regulations in the State of Maine do not have specific usury provisions on the books. Because there are no usury provisions per se in the State of Maine when it comes to personal loans, there are not any specific penalties for charging an interest rate above the six (6) percent level in many instances.
However, if a person persists in lending to other individuals and charges interest above the six percent level, there can be some sanctions available if the practice appears to amount to loan sharking.
The basics of Maine interest rates laws are listed in the table below. See Consumer Protection Resources for more information.
|Statute||Maine Revised Statutes Title 9-A|
|Legal Maximum Rate of Interest||6% unless otherwise agreed (Tit. 9-B §432)|
|Penalty for Usury (Unlawful Interest Rate)||N/A|
|Interest Rates on Judgments||For judgments below $30,000, the interest rate is 15 percent. On the other hand, for judgments above $30,000, the interest rate is set at the 52-week average discount rate for T-bills plus an additional 4 percent.|
|Exceptions||Pawn brokers (Tit. 30-A §3963); secured transactions (Tit. 11 §9-1201); consumer credit (Tit. 9-A §2-201)|
Note: State laws are constantly changing -- contact a Maine consumer protection attorney or conduct your own legal research to verify the state law(s) you are researching.
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